I am an very novice investor in central Il. I own one rental property and would like to aquire more. I have aprox 10K in equity in this property, but I have not extracted it yet.
Would it be in my best interest to pull it out in a line of credit to use as a down payment for the next property?
I have good credit, but lack the knowledge to expand by portfolio.
any info would be helpful!
The purpose of a line of credit is to help acquire properties, but most investors try to pay it off and keep it open. Sounds like you’re looking for taking it out permanently at a lower rate, which would be a home equity loan.
I’d go for a zero down investment or do a seller second to keep the money in your pocket. There are investor lenders out there who offer 100% investor financing, no seasoning and the rates are fair. 10k isn’t much and it seems like a waste to do it as a downpayment if that’s all you have.
I agree with Deeinaustin, Keep this in mind " A Fool and His Money are Soon Departed" Educate yourself, keep the 10k in the house and buy no money down.
if you only have 10k equity - if you take it out of the property - you’re maxed on it - that’s “fast money” movements.